Russia offers to let Kazakhstan oil exports via Ukraine to Europe to hedge risks

By Alla Afanasyeva and Gleb Gorodyankin AKTAU Kazakhstan (Reuters) - Russia has offered to let Kazakhstan ship its oil to Eastern Europe via the Druzhba pipeline's spur in Ukraine, Russia's Energy Ministry said on Wednesday, in a move seen as Moscow's attempts to hedge transportation risks. "Russia has offered Kazakhstan to study the possibility of carrying out Kazakh oil transit via the Russian Federation through the Druzhba oil pipeline to Eastern and Southern Europe," the Energy Ministry said in an email to Reuters. It added that the offer was made during talks on Sept. 9 in the Kazakh capital Astana. Subsequently, Kazakh oil pipeline monopoly KazTransOil , offered Kazakh oil companies to consider shipping its oil via the Soviet-built Druzhba pipeline to Eastern and Southern Europe, in a letter seen by Reuters. "I see only one reason behind it - it's not very easy (for the Russian companies) to go via Ukraine," a trader in a Russian oil company said. The volume of oil, which would be shipped from Kazakhstan to Slovakia and Hungary, was not stipulated in the letter. Moscow has been trying to cut exports of oil and gas via Ukraine, a key transit route to Europe. It has yet to restart gas supplies to Ukraine, which is battling pro-Moscow insurgency in the east of the country, despite an agreement struck last month. "I think this is aimed at cutting risks of oil supplies in this direction, there are no other reasons. Why give up the 'sweet' route?" another trading source said. Oil supplies via the southern spur of the Druzhba pipeline totaled 11.36 million tonnes in January-September, including 7.95 million tonnes shipped to Slovakia and Hungary, according to the Russian Energy Ministry data. Kazakhstan's total oil transit via Russian oil pipeline monopoly Transneft - from the Baltic port of Ust Luga and the Black Sea port of Novorossiisk - stood at 12.53 million tonnes for the same period. Sources in Kazakh oil companies have been skeptical about switching their supplies to Druzhba from the ports, while political risks have also weighted on this option. "The economics (of supply) to Hungary and Slovakia is $5 per barrel worse than in Ust Luga," a source said. (writing by Vladimir Soldatkin; Editing by Lidia Kelly and Louise Heavens)